Thomson Reuters Developments
A summary was provided of recent news from the last two months about developments at Thomson Reuters. These news stories covered events like the announcement that Bloomberg chairman, Peter Grauer, is stepping down from Blackstone Group’s board, the release of Reuters' Q4 financial statement, and Reuters chairman, David Thomson, objections regarding Blackstone’s offer. The news is listed in chronological order to provide a clear picture of what is happening in the company.
Developments around the Blackstone deal
On January 29, Financial Times drops the news on Blackstone acquiring Thomson Reuters in order to set up Reuters to compete directly with Bloomberg. For more than 10 years, Reuters has been trying to come up with ways in which they were able to derive value from the £8.7 billion acquisition of Reuters by Thomson Financial in 2008. Blackstone is now coming up with the answer.
On January 30, the details dropped about the deal between Blackstone Group LP. It was now known that the company was in talks to acquire a 55% stake in Thomson Reuters Corp. The deal is estimated to be worth $17 billion. According to the specifics of the deal, Thomson Reuters would remain in control of its international news service, Reuters, as well as the legal, tax and accounting divisions.
On February 1, Blackstone announced their financial results for Q4. Their profits increased 5% on private-equity gains and were pushed by large gains in private-equity units and good performance when it comes to real estate, credit, and hedge funds. This comes shortly after Blackstone agreed to buy a majority stake in the Thomson Reuters, the parent company of Reuters News.
Another news article that dropped on February 1 talks about Blackstone President Tony James announcing that the future of Thomson Reuters is "in selling data, not in selling terminal desktop products to traders, bankers, and investors".
On February 2, Bloomberg chairman Peter Grauer announced he will be stepping down from Blackstone Group’s board after the group announced a $17.3 billion deal with Bloomberg's competitor Thomson Reuters. While technically he isn't required to do so, "felt this was the appropriate step given the appearance and potential of a conflict".
On February 5, Financial News dropped an opinion piece where they question whether Blackstone will be able to persuade banks to switch to Thomson Reuters. The firm that already confirmed doing so is JPMorgan. They announced they will be throwing out their Bloomberg terminals and replacing them with Thomson Reuters machines.
Also on February 5, Seeking Alpha published a think piece on the deal. The website stated that "Reuters is selling most of its core F&R business to Blackstone and affiliates" and "the company will transform in a major way following this complicated deal." They further explain that "Thomson Reuters will be deleveraged a great deal, will be able to buy back many shares and even have room for bolt-on deals following this transaction."
On February 8, Reuters released their financial statement for Q4, saying that their revenue has gone up 3%. They also quote their net earnings to be $591 million, or 81 cents per share, which in comparison is down from $2.24 billion, or $3.03 per share in 2016. Overall, Reuters beat their profit forecast but missed on revenue.
On February 13, Jim Smith, President, and CEO of Thomson Reuters ended up in the hospital after feeling unwell. He remains there for observation, while Stephane Bello, Executive Vice President, and CFO took over his duties.
On February 15, David Thomson, who is board chairman of Thomson Reuters, aired his objections to other members of the board after reviewing Blackstone’s offer. Rumors say that most of Thomson Reuters board members disagreed with David.
On February 20, the company provided an update saying that Smith remains under observation and has suffered from arrhythmia. The statement said the CEO was in stable condition.
On March 1, three banks that are leading the $13.5 billion loan and bond financing for the Blackstone — Thomson Reuters deal, announced that they are trying to get more banks on board. 21 more banks expected to join in on the financing. The backing is led by JP Morgan, Bank of America Merrill Lynch and Citigroup.
On February 1, Thomson Reuters announced they now offer an Investment Research Marketplace on their Eikon product. This is a solution that allows for buy-side firms to buy research from sell-side contributors. Thomson Reuters Investment Research Marketplace in Eikon will "host subscription-based collections of a select number of global sell-side contributors". Buy-side firms will buy the research collections by signing a contract directly with Thomson Reuters.
On March 5, Thomson Reuters announced their collaboration with eBrevia, a leading machine-learning analytics platform. The companies will collaborate in order to "help enterprises tackle large and complex contract remediation projects involving commercial contracts. The collaboration enhances the award-winning managed services from Thomson Reuters with greater technology enablement, accelerating clients’ ability to execute on contract remediation".
On March 7, Thomson Reuters announced they are adding a new feature to their Data Privacy Advisor. The feature will allow data privacy professionals to easily track and assess new happenings in the fast-moving regulatory environment. The update includes an Enforcement Heat Map which gives an overview of enforcement actions across a number of jurisdictions.
We provide a summary of the most recent developments at Thomson Reuters from the last two months across 15 different news articles.